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此文档收集于网络,如有侵权,请联系网站删除DEALING WITH COMPETITION11 C H A P T E R LEARNING OBJECTIVESAfter reading this chapter, students should:q Know how marketers identify primary competitors q Know how we should analyze competitors strategies, objectives, strengths, and weaknessesq Know how market leaders can expand the total market and defend market shareq Know how market challengers should attack market leadersq Know how market followers or nichers can compete effectivelyCHAPTER SUMMARY To prepare an effective marketing strategy, a company must study competitors as well as actual and potential customers. Companies need to identify competitors strategies, objectives, strengths, and weaknesses. A companys closest competitors are those seeking to satisfy customers and needs and making similar offers. A company should also pay attention to latent competitors, who may offer new or other ways to satisfy the same needs. A company should identify competitors by using both industry and market-based analyses. A market leader has the largest market share in the relevant product market. To remain dominant, the leader looks for ways to expand total market demand, attempts to protect its current market share, and perhaps tries to increase its market share. A market challenger attacks the market leader and other competitors in an aggressive bid for more market share. Challengers can choose from five types of general attack; challengers must also choose specific attack strategies.A market follower is a runner-up firm that is willing to maintain its market share and not rock the boat. A follower can play the role of counterfeiter, cloner, imitator, or adapter. A market nicher serves small market segments not being served by larger firms. The key to nichemanship is specialization. Nichers develop offerings to fully meet a certain groups of customers needs, commanding a premium price in the process. As important as a competitive orientation is in todays global markets, companies should not overdo the emphasis on competitors. They should maintain a good balance of consumer and competitor monitoring. OPENING THOUGHT This chapter adds an additional element to the complexity of marketingcompetitive analysis. Students who are having difficulty just understanding consumers and potential markets might begin to be overwhelmed when you add to their load the concept of understanding and predicting competitive responses to marketings responsibility! Care should be taken not to over dramatize the importance of monitoring competition, however, many firms do not give competitor reactions the attention it merits so some emphasis is needed in teaching marketing to students. A key concept introduced in this chapter is that of market nichera specialist in small markets underserved by larger corporations. Many large firms today started out as “nichers” and many large firms of tomorrow are our “nichers” today. The concept of “nichers” and the potential of growing them into larger firm can be excitingthe reason so many students study marketing! TEACHING STRATEGY AND CLASS ORGANIZATIONPROJECTS1. At this point in the semester-long project, students should be prepared to present their competitive analysis. Who are the market leaders for their chosen product or service? What niche have they identified for their product/service? Is their product or service going to be a leader, follower, or challenger to well-established products or brands? 2. Michael Porters Five Forces model is as applicable today as it was when it was introduced. Have the students select a market or market segment (jeans, cell phones, etc.) and using Michael Porters model, completely define these five forces for the market or market segment. Who are the potential entrants, who are the suppliers (and how much power do they have), who are the buyers (and what sort of buying power do they have), what are the substitutes and how is the industry segmented (market share is a good indicator of segmentation for this project)? Students analysis and answers should be comprehensive. 3. Sonic PDA Marketing Plan Competitive strategy analysis is an important part of two areas within the marketing plan. First, in assessing the Current Situation, businesses need to identify key competitors and learn about each rivals strengths and weaknesses. Second, competitive intelligence and analysis shapes the competitive strategy that is supported by the marketing mix.Sonic is a new entrant in an established industry that has competitors with relatively high brand identity and strong market positions. As you assist Jane Melody in development of the Sonic marketing plan, consider the following key issues that will affect Sonics ability to introduce a new PDA successfully: What is the strategic group for Sonic? Which firm is the market leader, and what are its objectives, strengths, and weaknesses? What additional competitive intelligence is needed to answer the question about the market leader more completely, and how should Sonic go about getting the information? Which competitive strategy should be most effective for Sonic?Enter your answers in a written marketing plan or enter them into the Competition, SWOT Analysis, and Critical Issues sections of Marketing Plan Pro.ASSIGNMENTSSmall Group Assignments1. Identify the major competitors in the blue jeans market. Who has the leading market share, whose shares have declined? What segmentation is(has) occurring/occurred in the blue jeans market and why? Did demographic changes affect the market (from baby boomers to Gen X or Gen Y)? What competitive signs, symbols, events, or occurrences did Levi-Strauss miss? What current shifts in competition and channel power is occurring and what can Levi-Strauss do to minimize the impact from these changes? 2. The competitor map (Figure 11.2) shows a mapping of competitors for Eastman Kodaks film business. Choosing an industry of their choice, ask the students to complete a competitor map for that industry. For instance, what would a competitor map look like for cell phones, blue jeans, colleges, and universities? Individual Assignments1. For a market leader, increased sales must come from expanding the total market through adding new customers or increasing the usage of the product. Picking a market leader in an industry (Dell computers for example) explain how your market leader can expand the total market by adding new customers or increasing the usage of the product. Be as specific as possible. 2. In the Marketing Memo entitled, Strategies for Entering Markets Held by Incumbent Firms, the authors outline four strategies for launching a new brand into a market dominated by one brand. Students are to present examples of brands/firms competing in each of these strategies. Students should include their rationale for placing the firm/brand in each of the positions. Think-Pair-Share1. In challenging a market leader, the challenger has a number of differing strategies to employ. Choosing the right one (or wrong one) could result in a larger market share and increased profits (or disaster) for the challenger. In choosing a specific attack strategy, the challenger must go beyond and develop specific strategies of price, lower price goods, value priced goods and services, and so on. Students should explore these strategies and come prepared to identify one company (or brand) that has chosen each of these strategies to implement and to defend their selection(s). 2. Market-nichers avoid large markets and try to be the leader in a small market or niche. Nichers have three tasks: creating niches, expanding niches, and protecting niches. Multiple niching is preferable to single niching. Students should identify three “nichers” (firms and/or brands) and explain why they have identified these as “nichers” based upon the criteria in the chapter. MARKETING TODAYCLASS DISCUSSION TOPICSToys “R” Us and KB Toys are facing price pressures from other retailers. In fact, at one time Toys “R” Us flirted with selling its Toys “R” Us stores and concentrating on its more profitable Babies “R” Us niche. In light of the information presented in this chapter, should Toys “R” Us concentrate on niche marketing to babies? In preparing your answers, you first should do a complete financial profile on the company, and then do a demographic profile on the future demand for baby products. Is this market going to increase or decrease in the future? If the company decides on this strategy, what must Toys R Us do to prevent firms like Wal-Mart and Target from taking share away from them as they did in the toy business? END-OF-CHAPTER SUPPORT MARKETING DEBATEHow Do You Attack a Category Leader? Attacking a leader is always difficult. Some strategists recommend attacking a leader “head-on” by targeting its strengths. Other strategists disagree and recommend flanking and attempting to avoid the leaders strengths. Take a position: The best way to challenge a leader is to attack its strengths versus the best way to attack a leader is to avoid a head-on assault and to adopt a flanking strategy.Pro: What are some of the strengths of a market leader? A market leader as defined here, generally, has the largest market share in the relevant product, market, usually leads the other firms in price changes, new-product introductions, distribution coverage, and promotional intensity. Market leaders may also have products that generally hold a distinctive position in consumers minds. These strengths and competitive advantages can be formable when used by a savvy and seasoned firm. Trying to attack the leader on its strengths requires point-of-differences in brands, sophisticated marketing positioning, and “deep pockets” for the challenger.The underling strategy for performing a head on attack to a market leader is: If the attacking firm sees that the market leader is not serving the market well; that the attacker has out-innovated the market leader through product innovations or other differentials; or if the market leader is conservatively spending or is “milking” the market. Con: A flanker attack can be directed along two strategic directionsgeographic and segmental. In a geographic attack, the challenger spots areas where the opponent is underperforming. In segmental, the challenger uncovers underserved market needs and attempts to penetrate these markets with its products. Flanking is in the best tradition of modern marketing that holds that the purpose of marketing is to discover needs and satisfy them. Flanking is particularly attractive to challengers with fewer resources.MARKETING DISCUSSIONPick an industry. Classify firms according to the four different roles they might play: leader, challenger, follower, or nicher. How would you characterize the nature of competition? Do the firms follow the principles described in the chapter? Suggested Response:Student answers will differ according to the industries picked and the role the firms play in that industry. All answers should contain some of the following:Leaders: largest market share, leads on price changes, new-product introductions, distribution coverage, and promotional intensity. Have products that generally hold a distinctive position in the minds of the consumers. Can use strategies that expand the total market demand: (new customersmarket-penetration strategies, new-market segment strategies, geographic-expansion strategies).More usage (level of quantity or frequency of consumption). Protect its current market share through good defensive (position defenses, flank defense, preemptive defense, counteroffensive defense, mobile defense, contraction defense). Challengers, followers: can attack the leader for increased market share, (challengers), or followers (“not rock the boat”), through: Frontal attack. Encirclement attack. Flank attack. Bypass attack. Guerrilla warfare. MARKETING SPOTLIGHTAccentureDiscussion Questions:1) What have been the key success factors for Accenture?a. Niche marketing to the professional services area in management and technology consulting. 2) Where is Accenture?a. Niche marketer3) What should it watch out for?a. Decline or closing of the niche b. Increased competition in the niche by larger firms.4) What recommendations would you make to senior marketing executives going forward?a. Review its niche to see if it is performing services that others cannot or are unwilling to perform. 5) What should the company be sure to do with its marketing? a. Emphasize the advantages of a niche marketer: Knowing the target customers so well that it meets their needs better than other firms selling to this niche casually.DETAILED CHAPTER OUTLINE Building strong brands requires a keen understanding of competition, and competition grows more intense every year. New competition is coming from all directionsfrom global competitors; from online competitors; from private label and store brands; and from brand extensions from strong mega-brands leveraging their strengths to move into new categories. Too effectively, devise and implement the best possible brand positioning strategies, companies must pay keen attention to their competitors. COMPETITIVE FORCES Michael Porter has identified five forces that determine the intrinsic long-run attractiveness of a market or market segment: industry competitors, potential entrants, substitutes, buyers, and suppliers. The threats these forces pose are as follows: Figure 11.1 shows Michael Porters model.A) Threats of intense segment rivalry.B) Threat of new entrants.C) Threat of substitute products.D) Threats of buyers growing bargaining power.E) Threat of suppliers growing bargaining power. Review Key Definition here: Michael Porters ModelIDENTIFYING COMPETITORS It would seem a simple task for a company to identify its competitors. However, the range of a companys actual and potential competitors can be very broad. A) Many businesses failed to look to the Internet for their most formidable competitors. Industry Concept of Competition What exactly is an industry? An industry is a group of firms that offer a product or class of products that are close substitutes for one another. A) Industries are classified according to: 1) Number of sellers2) Degree of product differentiation3) Presence or absence of entry4) Mobility 5) Exit barriers6) Cost structure7) Degree of vertical integration8) Degree of globalizationNumber of Sellers and Degree of Differentiation The starting point for describing an industry is to specify the number of sellers and whether the product is homogeneous or highly differentiated. These characteristics give rise to four industry structure types:A) Pure monopoly.B) Oligopoly.C) Monopolistic competition.D) Pure competition. An industrys competitive structure can change over time. Entry, Mobility, and Exit Barriers Industries differ greatly in ease of entry. A)Major entry barriers include:1) High capital requirements.2) Economies of scale.3) Patents and licensing.4) Scarce locations.5) Raw material.B) Even after a firm enters an industry, it might face mobility barriers when it tries to enter more attractive market segments. C)Firms often face exit barriers such as:1) Legal or moral obligations.2) Government restrictions.3) Low asset salvage value.4) Lack of alternative opportunities.5) High vertical integration.6) Emotional barriers.Cost Structure Each industry has a certain cost burden that shapes much of its strategic conduct. Degree of Vertical IntegrationA) Companies find it advantageous to integrate backward or forward (vertical integration).B) Vertical integration often lowers costs, and the company gains a larger share of the value-added stream. Degree of GlobalizationA) Some companies are highly local; others are global. B) Companies in global industries need to compete on a global basis if they are to achieve economies of scale. Market Concept of Competition Using the market approach, competitors are companies that satisfy the same customer need. Marketers must overcome “marketing myopia” and stop defining competition in traditional category terms. A) Rayport and Jaworski suggest profiling a companys direct and indirect competitors by mapping the buyers steps in obtaining and using the product. Figure 11.2 illustrates Eastman Kodaks competitor map.ANALYZING COMPETITORS Once a company identifies its primary competitors, it must ascertain their strategies, objectives, strengths, and weaknesses. StrategiesA) A group of firms following the same strategy in a given target market is called a strategic group. Figure 11.3 shows a chart for the four strategic groups. Objectives Once a company has identified its main competitors and their strategies, it must ask what each competitor is seeking in the marketplace. What drives each competitors behavior? A) One useful initial assumption is that competitors strive to maximize profits. B) A company must monitor competitors expansion plans. Figure 11.4 shows a product-market battlefield map for the personal computer industry. Strengths and WeaknessesA)A company needs to gather information on each competitors strengths and weaknesses. Table 11.1 shows the results of a company survey that asked customers to rate its three competitors on five attributes. B)In general, a company should monitor three variables when analyzing competitors:1) Share of market.2) Share of mind.3) Share of heart. Table 11.2 shows the number for these measures for the three competitors
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